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Uber’s head of business leaves, with more changes on the way

Emil Michael’s involvement in at least two incidents came up in the course of the probe, led by former U.S. attorney general Eric Holder.

An investigation into Uber recommended parting ways with Michael and adding more independent board members, people familiar with the matter said. (Ryan Remiorz / The Canadian Press File Photo)

By Eric NewcomerBloombe

Mon., June 12, 2017

SAN FRANCISCO—Emil Michael, head of business at Uber Technologies Inc. and the closest confidant of founder Travis Kalanick, left the beleaguered ride-hailing company after the board recommended his removal. The change stems from an investigation into workplace harassment and culture that was presented to directors on Sunday.

Michael and Kalanick’s involvement in at least two incidents — the mishandling of an Indian rape victim’s medical records and a visit to a Seoul karaoke bar that reportedly prompted a human-resources complaint — came up in the course of the probe, led by former U.S. attorney general Eric Holder, Bloomberg reported. The San Francisco-based company’s board met for more than six hours on Sunday to discuss the findings of that investigation, and directors approved all the recommendations, a board representative said, without elaborating on the details.

The suggested actions from the Holder report included parting ways with Michael and adding more independent board members, people familiar with the matter said. Uber is planning to appoint Wan Ling Martello, an executive vice-president at Nestle SA, to the board.

The company, which is closely held but valued at $69 billion (U.S.), plans to begin implementing the changes early this week and will outline them to employees at a meeting Tuesday. Ryan Graves, a director and longtime Uber executive, told employees of Michael’s departure in an email, describing him as “instrumental in building the business we have today.” Michael will be replaced by David Richter, who was vice-president of strategic initiatives before his promotion, according to a staff email obtained by Bloomberg.

“David is an extremely talented leader, and I have high confidence in his ability to help drive the company forward,” Michael wrote in an email to employees. “Uber has a long way to go to achieve all that it can, and I am looking forward to seeing what you accomplish in the years ahead.”

Other considerations at the board meeting included a possible leave of absence for CEO Kalanick, who has been under fire for his involvement in the alleged incidents in question and his coarse management style. In addition to responding to a series of scandals, Kalanick has been grappling with the accidental death of his mother, whose funeral was Friday.

The investigation by Holder’s law firm, Covington & Burling LLP, and a separate examination of human-resources matters by Perkins Coie LLP were provoked by allegations of sexual harassment and discrimination from a former employee in February. The scope soon expanded to include over 200 HR claims and resulted in the firings of more than 20 employees. Eric Alexander, who oversaw business in Asia, departed amid reports of the India rape controversy last week.

In the last four months, Uber lost a president and the heads of its autonomous driving unit, finance, mapping, policy, software engineering, and product and growth. The role of chief financial officer remains open, and the company is actively searching for an operating chief to provide leadership help to Kalanick.

Last week, the company said it hired Frances Frei, a Harvard Business School professor, as senior vice president for strategy and leadership, and Apple Inc.’s Bozoma Saint John as chief brand officer.

The new board member, Martello, brings experience managing sprawling workforces. She was executive vice-president for global e-commerce at Wal-Mart Stores Inc. At Nestle, she was chief financial officer before becoming head of Asia, Oceania and sub-Saharan Africa for the food giant. She’s also a director of Alibaba Group Holding Ltd. and on the audit committee. It wasn’t clear whether her appointment was finalized in Sunday’s meeting.

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